What Happens If Tennessee Doesn't Get Promised Jobs After UAW Defeat?

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1st Gear: The UAW Lost, Now Corker Needs To Deliver


Workers narrowly rejected the UAW in Tennessee, which is of course bad for the UAW. Here's how it could be bad for Republicans.

One of the biggest last minute moves was a promise from Senator Bob Corker that they'd lose the 7-passenger SUV if they voted in a union. The inverse of that promise is that, now that it's over, they will get it. There was also an implied promise from the governor that they'd get more jobs.

So… what happens if they don't?

Hilariously, Corker tried to parse what he said:

The company reiterated its longstanding position that the union vote would not factor into the decision, and Corker acknowledged that he had no information on whether the company would also expand if the union won.

But the implication was clear, and union leaders said after the vote that the senator's statements — coming in concert with threats from state lawmakers to torpedo state incentives if the UAW won — played a key role in the vote.


Who knows what kind of political impact it'll have if Tennessee doesn't get more VW jobs in the short term or Tennessee doesn't get more jobs in the long term. It's possible Corker is just smart and knows, with the economy expanding, the UAW vote would have almost no impact either way.

Whatever the outcome, this is going to continue to be fun to watch.

2nd Gear: Rebates Are Returning


The economy was bad. People stopped buying cars. The economy improved. People hesitated to buy cars. The economy continued to improve. Many people bought many cars.

Is that pent up demand over? Nathan Bomey asks the question and points out that we're seeing big rebates for the first time since 2009.

Pent-up demand — the phenomenon of buyers replacing 15-to-20 year-old trucks that have just worn out — fueled the entire industry's truck boom in the past two years. While the number of those "must replace" buyers is flattening, one observer remains optimistic the truck surge has not exhausted itself.


No answers yet, but if you wanted to buy a truck now is a good time.

3rd Gear: The UAW's Other Challenge


Now that the distraction in Tennessee is over, the UAW and Detroit's 2.5 automakers are about to butt heads on a deal they made in 2007 to create a two-tier system that gives some entry-level workers a lower wage than some older ones (about $16-$19 compared to $28).

Many within the UAW say they don't think two-tier is necessary now that the automakers are bringing in huge profits. The automakers say the reason they're making those profits is because of two-tier.


Both sides have a point, and union negotiations in 2015 are going to be interesting, but credit Nick Bunkley pulling some of the stats:

For example, Ford, which had 9,709 entry-level workers as of Jan. 5, saves nearly $20 million a year for every $1 gap between the two wage scales. Giving those workers full wages and benefits this year would cost about $400 million, or less than 5 percent of the $8.8 billion it earned in North America last year before taxes.


One thought is that helping move people from first-tier to second-tier wages faster might be on the table, or more profit-sharing, the appeal of which is that if workers do make them more profitable they'll be able to benefit.

4th Gear: You Down With GDP? Yeah you know me!


Japanese had a weaker-than-expected fourth quarter in terms of GDP, and they were expecting nothing great. Even words, an upcoming tax hike on goods probably encouraged people to spend more.

So how does this impact the auto industry?

CNBC reports that Japan will probably push forward with more stimulus and make some other changes, including pushing the Trans-Pacific Partnership — a trade deal that the U.S. wants but Detroit's automakers are wary of.


5th Gear: How Are Those Bad Dealers Going Good?


The Federal Trade Commission smacked down some dealers who were using deceptive advertising practices, causing many to settle. What does that settlement look like?

Via Automotive News:

To do that, White had to hire a Web site provider and pay about $2,000 to program a Web page to include the variable disclosure next to the price and add a link to take customers to a page of rebate rules. He cited legal fees as well among the costs of the compliance effort; he wouldn't give the total amount, but says it was not "exorbitant" because he chose to settle with the FTC instead of challenging the allegations.

White says he has stopped mentioning prices in TV and radio commercials: "I stay away from advertising $1,000 off this car because I don't want to fight the disclosure laws. I just didn't want to get into it."


Reverse: And they're all still on the road...

On this day in 1972, the 15,007,034th Volkswagen Beetle comes off the assembly line, breaking a world car production record held for more than four decades by the Ford Motor Company's iconic Model T, which was in production from 1908 and 1927.



Neutral: What happens next? We know the outcome of the UAW vote, will this have any impact?


Photo Credit: AP Images

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